When Bad Things Happen to Good Markets

Worried about where the stock market is going? You should be. The economic news seems good, but in the world of investing, good can be bad. Good times breed enthusiasm and complacency, a feeling that a rising market will rise forever. And yet, good times are often a harbinger of the apocalypse to come.

For example, in 1999, gross domestic product grew 4.7%, which turned out to be the fastest rate during the entire period from 1985 to 2017. Standard & Poor's 500-stock index rose more than 20% in 1999, for the fifth year in a row. Then the dot-com bubble burst, and the market tanked.

In late August, the current bull market became the longest on record, at least dating back to 1932. (A bull market